Nuclear Verdict Case Study – $1 Billion Negligent Hiring, Retention & Supervision Loss

What Is a Nuclear Verdict?

Nuclear verdicts refer to exceptionally high jury awards—generally, those exceeding $10 million. Such verdicts have become increasingly common in the past decade. In fact, the National Law Journal reported the average jury award among the top 100 U.S. verdicts more than tripled between 2015 and 2019, skyrocketing from $64 million to $214 million. Furthermore, 30% more verdicts surpassed the $100 million threshold in 2019 compared to 2015.

A variety of factors have contributed to this trend, including rising litigation funding, eroding tort reform and, above all, deteriorating public sentiment toward businesses. Amid growing corporate distrust, businesses have not only been expected to meet higher standards in their operations but also held more accountable for their wrongdoings. Upon being sued and taken to court, businesses have frequently encountered juries that are sympathetic to plaintiffs. Compounding this issue, there’s a rising perception that businesses (especially large ones) can always afford the cost of damages. This means juries are likely to have fewer reservations when awarding substantial damages to plaintiffs, resulting in nuclear verdicts.

Nuclear verdicts can carry significant consequences for businesses of all sizes and sectors, causing lasting reputational harm, posing underinsurance concerns and wreaking largescale financial havoc. That’s why it’s vital for businesses to better understand these verdicts and how to prevent them. This case study summarizes a recent nuclear verdict, outlines factors that led to the verdict, highlights associated compliance considerations and provides related risk mitigation measures.

$1 Billion Negligent Hiring, Retention & Supervision Loss

In October 2012, a 14-year-old girl was attending a birthday party outside an apartment complex in Jonesboro, Georgia, when she was allegedly raped by a security guard. The girl was walking toward some picnic tables with her boyfriend when they were confronted by the security guard. From there, the girl stated that the armed guard ordered her boyfriend to stay put while he sexually assaulted her. Although the girl attempted to push the security guard away, she said she was unable to do so.

Case Details:

Afterward, the security guard left the area, and the girl and her boyfriend returned to the apartment complex to contact the police. The girl was then taken to a hospital to complete a rape kit and obtain additional care. Shortly following the incident, a psychotherapist also diagnosed the girl with post-traumatic stress disorder (PTSD). The security guard was ultimately arrested and sentenced to 20 years in prison for rape, statutory rape and child molestation.

In the coming years, the girl’s mother sued the apartment complex, its property manager and the security guard’s employer, Crime Prevention Agency, alleging that these parties’ negligence contributed to the incident and her daughter’s subsequent emotional distress. Although the charges facing the apartment complex and its property manager were eventually dismissed, the lawsuit against Crime Prevention Agency proceeded to trial in 2018. Since the company dissolved in 2016, it did not appear at the trial nor have legal representation.

During the trial, the girl, her mother and their legal counsel alleged that Crime Prevention Agency failed in its responsibility to adequately supervise and monitor the security guard at the time of the incident. The legal counsel also argued that the company was made aware that the security guard had been engaging in inappropriate behaviors with guests and tenants of the apartment complex in the past but had opted to ignore these concerns rather than take action that could have prevented future incidents. Furthermore, the legal counsel asserted that Crime Prevention Agency hired the security guard before he was even licensed to be an armed guard. The girl testified that the incident had largely impacted her life, causing her to become socially withdrawn, lose friends, have a more complicated relationship with her mother and feel less trusting of authority figures. She also stated that she required treatment for PTSD for years after the alleged assault.

In May 2018, a Clayton County jury determined that Crime Prevention Agency was liable for the incident and the girl’s related emotional hardships, handing down a $1 billion verdict. According to the National Crime Victim Bar Association, this verdict remains one of the largest awarded to an individual.

Factors That Led to the Verdict – Negligent Hiring, Retention & Supervision

Taking a closer look at this case, the main factors contributing to the nuclear verdict were negligent hiring, retention and supervision. Such negligence entails a business failing to exercise adequate care in the employment, retention or supervision of its workforce, thus resulting in reasonably foreseeable harm to another party.

In other words, if a business knew or should have known (had it taken appropriate measures) that an employee was unfit for their role upon hiring them and this unfitness results in illness, injury or other damages to another party, the business could be held liable for such damages. Similarly, if a business realized or should have realized during the course of a worker’s employment that they presented a foreseeable risk to others and failed to discipline or discharge that worker before they harmed another party, the business may be held responsible for the associated damages. Lastly, if a business neglected to reasonably control or monitor an employee’s actions and this lack of supervision permitted the employee to harm another party, the business could be held liable for the related damages.

As it pertains to this verdict, Crime Prevention Agency’s employment of the security guard, despite his lack of necessary licensing to be an armed guard, could constitute negligent hiring. Additionally, the company’s failure to respond to the security guard’s inappropriate behaviors in the past could be considered negligent retention and supervision.

Compliance Considerations

This nuclear verdict also poses compliance considerations related to negligent hiring, retention and supervision. It’s important to note that the laws regarding such negligence vary between states. Given that this particular verdict took place in Georgia, here’s an outline of the elements that the state utilizes to determine negligent hiring, retention and supervision in the workplace:

The employer failed to take reasonable care (e.g., performing background checks and conducting preemployment screenings) when hiring the worker.
The worker demonstrated dangerous tendencies that the employer didn’t identify or address.
The employer assigned the worker to a position in which they could potentially injure others, even though they knew or should have known that the worker was incapable of performing the role in a safe manner.
The employer’s negligence resulted in the worker causing reasonably foreseeable harm to others.

Risk Mitigation Measures

To avoid nuclear verdicts similar to the one resulting from this case, businesses should follow these risk mitigation tactics:

Minimize negligent hiring, retention and supervision exposures. Employers should implement vigilant hiring processes for all positions. These processes should include having job candidates fill out detailed applications, verifying their employment and educational history, contacting provided references, leveraging in-depth interviews and conducting sufficient background checks. Upon hiring employees, employers should provide them with proper training and supervision to set them up for success within their roles. Periodic, documented reviews should be utilized to better gauge employees’ work performance over time, with any complaints filed against staff taken seriously.
Ensure compliance. Workplace policies should be regularly assessed to maintain compliance with negligent hiring, retention and supervision laws as well as any other applicable federal, state and local regulations. Employers should consult legal counsel for additional compliance assistance.
Secure proper coverage. In this increasingly litigious environment, it’s crucial to purchase adequate insurance. Employers can reach out to a trusted insurance professional to discuss specific coverage needs.

Reach out to one of our trusted insurance advisors to discuss specific coverage needs, so you can avoid a Nuclear Verdict – regarding a Negligent Hiring, Retention & Supervision Loss.